Cross-Border Carbon Regulation and Forests in Russia: From Expectations and Myth to Realization of Interests

Abstract

Introduction of the EU Carbon Border Adjustment Mechanism over the period from 2023 to 2026 together with corporate commitments to achieve carbon neutrality and carry out commercial decarbonization have markedly increased interest in assessing the potential of carbon sequestration by Russian forests as a possible way to achieve decarbonization and facilitate Russian exports. The prevailing opinion in business circles is that a significant net positive carbon balance from Russia’s forests could circumvent the need for businesses to make costly reductions in their direct CO2 emissions. However, international decarbonization strategies and standards do not concur with that idea. Direct emissions will have to be reduced. Offset mechanisms, whose benefits are calculated as the difference between a baseline and an improved scenario for forest management (the principle of additionality), will compensate for only a part of the emissions. The experience of Canada is indicative, as it consistently implements measures to decarbonize industry without regard to the absorption of CO2 by its forests. Even though Canada has climatic conditions, forest growth, and population density similar to Russia’s, its policy is not dependent upon revising estimates of net CO2 absorption by forests upward. Forestry priorities in Russia, including reforestation, should instead be gradually shifted from managing commercial forests for harvesting timber to reducing all forest fires. Leased and non-leased forests should both be included, and reforestation that favors deciduous species and mixed forests should be given a higher priority. It is also necessary to remove barriers to forestry in agricultural forests and to plan for implementation of projects directed at improving both forestry and climate on the land leased out from the holdings of the State Forest Fund as well as on agricultural tracts, including those now overgrown by forests